Stock futures rise ahead of key Fed decision, Microsoft and Alphabet pop after earnings

Stock futures climbed early on Wednesday morning, boosted by strong gains from Google-parent Alphabet and Microsoft, as traders await the Federal Reserve’s latest interest rate decision, scheduled for later in the day.

Futures on the Dow Jones Industrial Average rose by 168 points, or 0.52%. S&P 500 futures gained 1%, and Nasdaq 100 futures increased 1.51%.

Alphabet shares rose nearly 4% after the tech giant’s quarterly report showed strong revenue from Google’s search business. That said, the company’s overall earnings and revenue came in below expectations.

Microsoft popped 3.7% even after the company’s earnings and revenue came in below analyst estimates.

Enphase Energy also popped on the back of its latest results, trading 9.7% higher. Chipotle also added 8% following its mixed second-quarter earnings release.

There are more major earnings reports to come. On Wednesday, Boeing and Shopify are expected to release their quarterly results before the bell. Qualcomm, Ford and Meta Platforms will report at the end of the day.

More than 150 S&P 500 companies have reported calendar second-quarter earnings thus far. Of those names, roughly 70% have beaten analyst expectations, FactSet data shows.

Investors are also awaiting a key announcement from the Federal Reserve. The central bank will announce its latest interest rate decision on Wednesday afternoon. Markets widely expect a three-quarter percentage point increase in the benchmark rate.

“With so many moving parts to consider, we expect markets to remain volatile after the FOMC meeting,” wrote Mark Haefele of UBS Global Wealth Management. “With the markets anticipating a 3.3% fed funds rate by year-end, this means that after this week’s meeting, there may be around 100bps of rate hikes by end-December. But the pace of hikes remains uncertain.”